As you may know I’ve turned most of my business attention towards a startup called CrankyAds for the past year or so.
Our team has been busy with the beta version of our software, ironing out bugs and figuring out what are the most important features to work on.
This process of running a software startup has certainly been the biggest learning experience I have had since the days when I first started building a web business in the late 1990s. Since I am not a developer, my role has been more CEO-like, doing an incredible amount of networking, looking at what our main constraints are and how we can solve them.
One of our main challenges has been speed and the prioritization of tasks. With limited man hours to develop features we have to be very picky with what we choose to work on. To help speed things up, we concluded hiring another developer would be worthwhile.
Making this decision lead to a cascade of tasks that has ultimately had the reverse effect – it’s slowed us down. It’s not exactly a completely negative thing, as we have learned a lot in the process of figuring out how we can hire help, but it has made the last few months less productive in terms of feature development than we would like.
When we decided to hire a developer it opened up another obvious constraint – cash flow. None of us take a salary from CrankyAds and what money we are making so far is going right back into the business. Although we tested contracting overseas and other arrangements to find more affordable development help, we have concluded that hiring locally is what we need to do.
Unfortunately local talent in our chosen language C# is not cheap, which lead us to the obvious conclusion – we need investors or some form of cash in a grant or similar.
I wasn’t super keen to take on investors for many reasons, mostly because I like things simple, and adding another interested party would only complicate things further. That being said, I’ve seen how effective investors can be at speeding up the growth of a business, and being so interested in the startup space, I’ve been learning a lot about seed and venture funding.
We decided that we would look at our options and at least get ourselves investor ready.
I’ve spent many hours over the previous months looking at investment options for CrankyAds. I’ve met so many people, attended a bunch of events and studied a heap of materials about startup funding.
Brisbane, while not exactly a huge city for startups, is experiencing a mini-boom and plenty of support groups are popping up. One of the support agencies is called iLab, which is a university linked incubator program. While attending a networking event, the iLab manager told me that their previous program had shut down and a new one was opening up, which would model the american style incubators like Y-Combinator. A $20,000 grant is included.
We decided to apply for iLab since we had most of the criteria already met. In a couple of hours I filled out the form to apply and we also had to do a short video to introduce our business, which we did one afternoon (and was it ever funny! – my business partners have not done much video before so the outtakes were plenty).
One Tuesday a month or so later I received an email from iLab that we had been selected from all the applicants as a finalist and would need to come into the iLab offices and do a seven minute pitch and proceeding question and answer session with a panel interview. We were excited because it would be our first ever pitch, however given only two days to prepare our presentation and practice did not give us much time.
Thankfully the criteria for the pitch was provided, so all we needed to do was sit down and fill in the blanks with some interesting slides, then decide what parts we would each present. I had already studied what to put into a “pitch deck” (your slide presentation), and iLab’s requirements were less than standard, so it was a nice entry into the world of pitching for us.
On the day of the presentation we went in confident after several practices. Upon entering the room we faced a panel of eight, most of whom I had never met before. I found myself quite nervous, which was a bit surprising as I have talked in front of much larger crowds before. I think in this case I was nervous because we were asking for something – entry into an incubator program – where all my previous presentations were teaching sessions with me as a leader.
Our presentation went well. The panel had some challenging questions, however because we have been testing a lot of different things with CrankyAds over the previous months and have fleshed out our strategy, we had plenty to talk about in terms of taking action, so could respond to most questions with an educated answer.
We found out a day later that we were accepted into iLab, which was fantastic, however we wanted to know more about the program before joining, so we scheduled an interview with the manager of the program for the following Monday.
Despite the $20,000 grant, which we could spend on whatever constraints we have in our business, and some pretty good support services, in particular access to potential investors and people who could help with some of our stumbling blocks, we declined the invitation to join the program. Our main justifications were the amount of equity they wanted to take in our business (10%) and the need to attend three week long bootcamps, which would take us away from what we really need to do – develop features.
Although we never joined iLab, the experience of pitching was fantastic, and we still have some great contacts there, so we may yet partner with them. If you are in Brisbane and looking for help with your startup, make sure you check out iLab and say hello to Leigh from me if you work with them.
As I write this we just completed another pitch this week, this time to a panel within the River City Labs co-oworking space in Brisbane. I recently joined the community by renting a desk, not so much because I need the office to work from, but more so because of the great contacts, resources and community of startups developing there, lead by local success story Steve Baxter, whom I recently interviewed on my podcast.
Steve served notice to all residents that we would have an opportunity to do a practice pitch in front of some successful people, including Steve himself. We jumped at the chance to not just practice our pitch, but show the leaders at River City Labs what we are working on and what our big picture vision is.
This time we needed a proper pitch, Silicon Valley style. Previously I attended a pitch event at River City Labs just as an audience member and wrote down lots of notes from the panelists about what they did or didn’t like about the pitches from other startups. I also purchased a course from Udemy about raising capital for startups. In this course was a great presentation on what to include in a pitch deck. I used all these resources to come up with what new content to add to the existing iLab presentation we already had.
Over the weekend I went to work on our new slides, and with Mick the CrankyAds lead designer, we added them to our presentation on Monday.
To give you an idea of what we focused on in our presentation, here is a checklist you can use for your own pitch deck…
Here are the topics our pitch deck focused on:
Our brief for the River City Labs was for a ten minute pitch and twenty minutes of questions after. The presentation we ended up with can be done in five-to-ten minutes depending on how in-depth we go. We wanted to make sure we had time for the demo and that we could do the demo even if internet access is not working.
Unlike the iLab pitch, I found the River City Labs pitch a lot less daunting. Possibly because it was technically a “practice”, and maybe because Steve himself and a few of the other guys in the panel I know like Colin and Peter, are laid back guys. However prior to going in and having our turn at pitching, several other residents at the Labs were also doing a practice pitch, and we received some pretty wild feedback on what they experienced.
I thought we were going to get hammered on a few points, but in the end our pitch was well received and everything went smoothly. Our only major weakness is determining a valuation for our company so we can confidently say how much equity we are offering in exchange for the investment.
We received a wide range of great feedback from the entire panel, so overall it was a very beneficial experience – and a confidence building one too.
Our team went back to my place after the pitch to do our customary CrankyAds yoga session (I have to keep the developers healthy with some exercise given they spend so much time in front of computers). We all had a little trouble finding our zen after such an exciting pitch session.
So after all that, are we any closer to taking on investment? The answer is yes, we are closer, but we are going to hold off for at least two more months. What we do know now is we have a solid presentation, which we can continue to tweak and hopefully eventually use to bring on the right people to help grow our startup.
We have begun doing week-long development sprints, a technique designed to zero-in on only a few core outcomes each week so we don’t get distracted, and can move forward consistently. We want to do at least two months worth of sprints to test important features and see how our audience responds. This will help us know more about why people use CrankyAds and also help us advance the business, which will make it easier to raise investment when we do so.
I hope this article helps you come up with your own pitch deck. We’ve only just started this process ourselves and doing two pitches hardly makes me an expert. The people I studied in the Udemy course had done a MINIMUM of 200 pitches, often even more before landing the funding they were after. Clearly there is a lot more to learn, but I’m loving the process, which is what matters most right now.
Photo courtesy of Robert Scoble
And learn how to build a better blog.